The Missing Five Minutes

What can one possibly do in five minutes? Some could gulp down a cup of coffee, grab a quick smoke, or call Mom. And then there are those who, according to an investigation by the Israel Securities Authority, earn NIS 337,000 at the public's expense.

An announcement by the authority last week indicates that Nir Brunstein, CEO of Poalim Capital Markets, a subsidiary of Bank Hapoalim, relayed information to stock trader Ofer Eisenberg at 12:05 P.M. on January 10, 2008, concerning the decline in value of hundreds of millions of dollars in the bank's mortgage-backed securities portfolio.

That information was relayed five minutes after the bank's board meeting and about two hours and fifteen minutes before the publication of a report on the matter.

So what's the problem? The problem is that Brunstein is not a member of Hapoalim's board - and was therefore not at the meeting. How, then, did he receive the information five minutes after the end of the meeting? Did he wait beside the conference room door? Apparently not.

Someone who was at the meeting informed Brunstein, and not just anyone, but rather a senior official at the bank.

Even though it is obvious that what happened during those five minutes is critical to the securities authority's investigation, the authority's chairman, Zohar Goshen and his seasoned investigators preferred not to address the matter and decided that Brunstein was responsible. True, he committed no crime, as the informer and the recipient were both bank officials. Still, who gave the information to Brunstein?

The authority filled in the details of everything that happened before 12:00 and after 12:05. At 12:00 the board meeting ended, and at 12:05 Brunstein told Eisenberg. In the following hour and 20 minutes, from 12:05 to 13:27, Eisenberg gave orders for 59 transactions to sell shares totaling NIS 16 million. As far as the authority is concerned, the five minutes are still "missing."

Hapoalim's board had 15 members, including deposed chairman Danny Dankner, a known close associate of Brunstein's. Dankner's involvement in the leaked information has apparently already been checked. No matter who the informer was, the question remains what his purpose was.

It is strange that the authority is ignoring those five minutes, and that it is not alone. While the Bank of Israel and the supervisor of banks have been the main critics of Hapoalim's management in recent years, and particularly so regarding CEO Zvi Ziv's resignation and the hasty appointment of Zion Kenan, this time central bank Governor Stanley Fischer and Supervisor of Banks Rony Hizkiyahu are watching silently from the sidelines.